UFC to pay hefty premium to cover insurance in New York

October 30, 2016

MMA Fighting reports that the UFC will need to pay $1,675 per fighter for its two shows that will be in New York this year.  The payment is the insurance premium based on a $1 million traumatic brain injury insurance provision that was part of the bill that legalized MMA in the state.

Based on the insurance coverage, the UFC will pay $43,550 for this type of insurance for UFC 205 on November 12th at Madison Square Garden.  It will pay $40,200 for its show in Albany on December 9th.  The amounts do not include the typical $50K medical and $50K accidental death insurance policies.

The $1 million traumatic brain injury insurance provision also applies to boxing events which has drawn the ire of boxing promoters.  Last week, boxing promoter Lou DiBella announced via press release that he would pull the remaining cards he was promoting in New York this year.

Payout Perspective:

The $1 million insurance provision was a likely concession by pro-MMA legislators to push through the bill to legalize professional mixed martial arts in the state.  We are now seeing the repercussions of this.  The expense to hold a combat sports event in New York will be at a premium and will likely foreclose a lot of smaller shows.  Boxing promoters have been vocal about this since the bill was legalized.  One might wonder whether there were lobbyists looking out for boxing’s interest last spring in Albany.  The news of the opposition to the insurance requirement is just coming out after the fact.

Show Money Episode 13 talks GSP contract, Zuffa purchase and WSOF woes

October 27, 2016

It’s another episode of Show Money with Bloody Elbow’s Paul Gift and John Nash.  In this episode, we talk GSP’s contract dispute, the WME purchase and WSOF’s troubles.

 

Jon Jones’ lawyer prepares for Oct. 31 arbitration

October 25, 2016

Jon Jones’ arbitration hearing is coming up next Monday and the former UFC light heavyweight champion’s lawyer, Howard Jacobs spoke about the upcoming case.

Jacobs, a noted anti-doping lawyer, indicated to Luke Thomas on his SiriusXM show that the products that were found in Jones’ system were a result of a contaminated product.  Per Jacobs, he states that USADA testing confirmed what Jacobs’ investigation found which reveals that the product is contaminated with Hydroxy-clomiphene, an anti-estrogenic agent, as well as the Letrozole metabolite, an aromatase inhibitor.  Both of the substances were found in Jones USADA tests.  The supplement/product that Jones took was not identified in the interview.

Under USADA rules, clomiphene and letrozole are “specified substances” under the World Anti-Doping Agency Code (“WADA”).  Per the WADA Code, “there is a greater likelihood that these (specified) substances could be susceptible to a credible non-doping explanation.”  The WADA Code recognizes that it is possible for a prohibited substance to enter an athlete’s body inadvertently, “and therefore allow a tribunal more flexibility when making a sanctioning decision.

Jacobs states that under the USADA rules, you may argue that taking the specified substances you are not at fault if you take a supplement or product that contaminated but you may argue that you’re not “significantly at fault,” which allows for the ability to argue a reduced sanction.

Jones could face up to a one-year suspension per the UFC anti-doping policy guidelines.

Payout Perspective:

Under Article 3.1 of the UFC Anti-Doping Policy, USADA shall have the burden of establishing that an Anti-Doping Policy Violation (ADVP) has occurred.  USADA must establish that an ADVP has occurred to “the comfortable satisfaction of the hearing panel bearing in mind the seriousness of the allegation which is made.”  The standard of proof is “greater than a mere balance of probability but less than proof beyond a reasonable doubt.”  It would seem that the legal standard is between “clear and convincing” and “more likely than not.”  Jones may have a rebuttable presumption or establish specified facts or circumstances if USADA establishes its burden.  Jones’ burden would be “by a balance of probability” per 3.1.  It would appear the standard that would be more likely than not.

Based on Jacobs’ view, it would seem that USADA knows that the product taken by Jones was likely contaminated and he apparently has the evidence.  It would seem that USADA might meet its burden in proving that Jones took the substance but Jacobs could establish that the product taken was done inadvertently.  As a result, Jacobs would be asking that Jones be given a more lenient sentence.  We shall see if that will happen on Monday.  Of course, the parties could settle the issue prior to the hearing.

Over a year later, Judge Boulware publishes opinion in Zuffa’s Motion to Dismiss

October 24, 2016

Judge Richard Boulware has filed his Order on Zuffa’s Motion to Dismiss Plaintiffs’ Amended Complaint in the antitrust lawsuit venued in Nevada.  The hearing was on September 25, 2015.  The order was finally entered on October 19, 2016.

Talk about a backlog of work for a federal judge.  But, from my understanding, this is typical for federal courts.

As we know, the judge denied Zuffa’s Motion to Dismiss although the written order was signed and dated over a year later by Judge Boulware.

The opinion denying the Motion to Dismiss is below:

Order on Zuffa’s Motion to Dismiss by JASONCRUZ206 on Scribd

Some notable issues in the Order.

Zuffa had the burden to prove that the Plaintiffs had no case since they brought the motion.  Under the Federal Rules of Civil Procedure, a court may dismiss a complaint as a matter of law (1) for lack of a cognizable legal theory or (2) insufficient facts under a cognizable claim.  The standard under Federal Rule 12(b)(6), it may dismiss a complaint for failing to state a claim upon which relief can be granted.

The court looked at the main arguments set forth by Zuffa in its opinion.

  1. Strong Competition v. Antitrust Violation

This argument was quickly dismissed by the court.  Essentially Zuffa argued that its business practices are examples of “strong competition” whereas Plaintiffs argue that Zuffa’s conduct “has foreclosed competition and thereby enhanced and maintained the UFC’s monopoly power in the Relevant Output Market and monopsony power in the Relevant Input Market.”  For purposes of meeting the threshold to satisfy a motion to dismiss, the Court sided with Plaintiffs.

  1. Properly Defined Relevant Markets

The court looked at whether the plaintiffs properly defined a “relevant market.”  Plaintiffs identified two relevant markets: 1) live Elite Professional MMA bouts (Relevant Output Market), and…live Elite Professional MMA Fighter services (the ‘Relevant Input Market’).  Zuffa claimed that these definitions were made solely for the purpose of litigation and that they were vague and subjective.

However, the Court sides with the Plaintiffs for purposes of this motion to dismiss.  The Court noted that the validity of the ‘relevant market’ is typically a factually element and not a legal element.  Remember, here the Court is looking at whether the lawsuit can be dismissed as a matter of law.  As the court notes the market may survive an initial scrutiny under the motion to dismiss, but may not under a motion for summary judgment or at trial.  But, the Court found that the Plaintiffs’ relevant market is sufficient for “Section 2” antitrust purposes

  1. Specificity of Anticompetitive Conduct

Zuffa argued that exclusive dealing arrangements are common, procompetitive and a part of sports and entertainment, Plaintiffs failed to allege specific facts showing that the exclusive arrangements foreclosed competition in either the input or output market and the UFC has no duty to deal with competitors.

The Court did not address the last argument (dealing with competitors) as it did not construe the complaint that it had to deal with competitors.

The Court does side with Plaintiffs in finding that its allegations that exclusive dealing arrangements are a part of the anticompetitive scheme.  It also dismisses the argument that Plaintiffs’ claims are a “monopoly broth” – the term given to the use of various allegations to satisfy an antitrust scheme.

  1. Ancillary Rights and Reduced Competition

The Court looked at the rights issue related to fighters signing off on their likenesses for purposes of Zuffa using for things such as video games.  Here, the Court utilized the same analysis as it did with the exclusive dealing contracts in finding that Plaintiffs pled sufficient facts to show an anti-competitive scheme.  Once again, the Court is not ruling on the actual evidence, but whether the Complaint states a sufficient amount of facts.

Payout Perspective:

The Motion to Dismiss should not be taken as a commentary on the strengths or weaknesses of Plaintiffs’ Complaint as a whole.  It is only a ruling on whether or not the Complaint was sufficient to past standards required by the rules under 12(b)(6) of the Federal Rules of Civil Procedure.  It was Zuffa’s burden to carry in order to prove that the Complaint could not pat muster.  The Judge, weighing the evidence in light of the rules, determined that the Plaintiffs had pled a sufficient amount for the case to go forward.  If this case goes to trial, the Plaintiffs would have to prove the claims in its Complaint.  Zuffa will likely bring a Motion for Summary Judgment after the discovery stage ends.  Essentially, it is similar to the Motion to Dismiss but would argue that none of the facts would support the claims and as a result, the lawsuit should be dismissed prior to trial.  Of course, discovery is ongoing so we shall see if there are facts that have been uncovered which would strengthen either party’s case.

Parsons diagnosed with CTE

October 21, 2016

The Boston Globe reports that former Bellator MMA fighter Jordan Parsons was diagnosed with chronic traumatic encephalopathy (CTE).  Parsons, who died after he was struck by a vehicle while as a pedestrian in May of this year is the first known case of an MMA fighter suffering from CTE.

Dr. Bennet Omalu, a forensic pathologist, disclosed the diagnosis.  Dr. Omalu first discovered CTE with former NFL football player Mike Webster after he passed away.  It led to the investigation of CTE in other NFL football players and eventually the lawsuits related to the discovery.  Dr. Omalu was portrayed by actor Will Smith in the movie, “Concussion.”

Currently, the WWE is defending a lawsuit brought by former contracted wrestlers related to CTE.  Of the claims, it believes that the WWE knew of the dangers of performing but allowed its contracted workers to continue with stunts that caused head trauma.

Payout Perspective:

Parsons’ diagnosis is ominous for Bellator and the UFC as they need only look to what has gone on with lawsuits in the NFL, NHL and WWE.  Certainly, Parsons is just one case, but it could lead to further investigation with former fighters that might bring legal action against promoters.

GSP’s legal team maintains UFC breached contract

October 18, 2016

Georges St-Pierre’s legal team has maintained that the former welterweight champ’s contract with the UFC is over due to the company’s breach per an ESPN report.

After GSP proclaimed that he was a “free agent” in an interview Monday on The MMA Hour, the UFC rebutted the statement with one of its own stating that he was still contractually obligated to fight for the company.

GSP’s lawyer, Jim Quinn of the law firm Weil, Gotshal and Manges out of New York, maintains that GSP’s contract is terminated.  He indicated that the UFC could take legal action or offer a new contract to the fighter.

One of the issues GSP’s lawyers contend that caused a breach was the lack of fights given the St-Pierre.  His lawyers state he has never received an actual bout agreement.  St-Pierre’s lawyers gave the UFC 10 days to offer St-Pierre a fight.  According to his laweyrs, the UFC responded on the final day in which it offered St-Pierre former welterweight champion Robbie Lawler.  But that did not come to fruition.

GSP’s current contract was signed in 2011 per ESPN.  Of course, the UFC has evolved since then.  Notably, as pointed out in the story, is that the UFC has Reebok as its official clothier.  Also, fighters are no longer able to have outside sponsors (aside from official UFC sponsors) to promote during fight week.  St-Pierre had (or has) a deal with Under Armour in addition to other non-UFC sponsors.

Although not mentioned in the ESPN story, the UFC anti-doping policy came into effect in 2015.  It’s not known whether GSP signed an addendum to his contract binding him to USADA testing.

Payout Perspective:

It appears we may have a new legal dispute on our hands.  To be fair, GSP’s lawyers gave an artificial deadline (unless a 10-day deadline to settle this type of dispute was set forth in GSP’s contract) for the UFC to offer St-Pierre a fight.  But, it seems that the UFC could have made strides to keep GSP either by offering a fight and/or come to a contract extension under new financial terms.  Whether or not an actual bout agreement is mandatory as an offer for a fight appears to be a big question in this legal dispute.  We will see if the parties will attempt to resolve the situation short of a lawsuit.

UFC states GSP still under contract

October 18, 2016

The UFC has responded to claims that Georges St-Pierre is a free agent.  Not surprisingly, the UFC denies claims that GSP is free from his contractual obligations from the UFC.

On The MMA Hour on Monday, GSP declared that he was a free agent per his attorney.  His claim was that the UFC did not provide GSP with a fight and as a result his contract was terminated.

In a prepared statement, the UFC responded later in the day:

“Georges St-Pierre remains under an existing agreement with Zuffa, LLC as his promoter.  Zuffa intends to honor its agreement with St.-Pierre and reserves its rights under the law to have St.-Pierre do the same.

Payout Perspective:

It looks like we may be heading to a legal dispute over GSP’s contract.  The declaration of a terminated contract by GSP was reminiscent to Rampage Jackson’s claim that he was free from Bellator’s contract due to not fulfilling certain things within the contract.  As you recall, a lawsuit occurred and was subsequently settled.  You can bet that the UFC would oppose GSP from fighting in another organization if it boils down to it.  GSP’s lawyers seem confident that there was breach of the contract, and/or an unmet requirement within the contract which allowed for the termination.  We will see if the parties can come to a resolution prior to litigation.

Nevada clarifies Conor’s fine

October 17, 2016

MMA Fighting reports that Nevada’s Athletic Commission’s executive director Bob Bennett has clarified the fine assessed to Conor McGregor from his bottle-throwing incident.  He states that the fine is $75,000 and not the $150,000 as previously reported.

Despite the fact that the $150,000 number was indicated at an open hearing of the commission, Bennett clarified that the fine was $75,000 and the value of a public-service announcement McGregor must do for the commission is valued at $75,000.

McGregor reportedly made $3 million from UFC 202 not counting undisclosed bonuses or PPV points.

The state attorney general originally recommended a $25,000 fine, 25 hours of community service and media training.  The commissioners believed that amount was not enough.

McGregor was not a fan of the $150,000 fine stating that he would not fight in Nevada in the foreseeable future.

Payout Perspective:

The backtracking to clarify the fine and then blame media seems like a mishandling of the situation by the NSAC and a way to reduce the fine without drawing an appeal.  The $75,000 value seems like it was pulled out of the air without any evidence that a PSA would cost this much.

Jones USADA arbitration set for Oct. 31

October 14, 2016

Jon Jones will be the first UFC fighter to have an arbitration hearing pursuant to the UFC anti-doping policy.  His hearing is set for October 31st according to MMA Fighting.

Jones’ hearing against USADA will be held in Los Angeles.  The hearing is based on his positive drug test which pulled him out of his unification bout against Daniel Cormier three days before UFC 200.  The fighter, beset with a multiple out-of-octagon issues, denied knowingly taking any illegal substance.  The Nevada Athletic Commission revealed that the banned substances found in Jones’ samples were hyrdoxy-clomiphene and Letrozole, anti-estrogen agents.

Jones faces a maximum one-year suspension from USADA.

Payout Perspective:

Unless there is a last-minute settlement between the parties, this will be the first and last arbitration under the current UFC-USADA format as the company sent a letter to all its contracted athletes detailing new procedures for the USADA appeals process.  Just a few months ago, Jones seemed upbeat about a possible return sooner than later.  We will see if that holds up at arbitration.

Aldo threatens to take UFC to court

September 28, 2016

MMA Fighting reports that a disgruntled Jose Aldo is talking about taking the UFC to court if he is not released from his contract.

According to a Combate report, Aldo has talked to a lawyer about his legal possibilities.  He has six fights left on his existing contract.

Aldo was angered that the company passed him over for a title shot against Conor McGregor at UFC 205.  Instead, the UFC chose Eddie Alvarez as the opponent for the Featherweight Champion.  McGregor has not defended the title since he defeated Aldo this past December.

Dana White indicated that he would speak to Aldo and his team and would not terminate the contract.

Payout Perspective:

The prospects of Aldo suing the UFC to get out of his contract are probably slim.  Rather, the talk of lawsuit is posturing so that White and the UFC grant Aldo some concession.  Whether it is monetary or he gets to pick his next fight and opponent, I would suspect that the UFC would be willing to negotiate with Aldo rather than deal with another lawsuit.

« Previous PageNext Page »